7 Year-End Financial Tips to Strengthen Your Future

1. Review and Reflect: What Changed This Year?

A year-end review allows you to evaluate what went well and where there’s room for growth. This isn’t about dwelling on missed opportunities; rather, it’s a chance to celebrate what you achieved and learn from any missteps.

If you experienced a major life change—such as a new job, a home purchase or a family addition—consider how these events impact your financial strategy. Life’s transitions may also open up tax and investment opportunities worth exploring with a financial professional.

2. Maximize Tax Efficiency

Tax planning is one of the most effective ways to boost your financial health. Here are some strategies to consider:

Tax-Loss Harvesting: If you have investments in taxable accounts, consider selling underperforming assets to offset capital gains. Not only can this lower your taxable income, but any excess losses can carry forward to offset future gains.

Optimizing Deductions: Gather receipts and supporting documents now if you plan to itemize, particularly if you've incurred large medical expenses or charitable contributions.

Charitable Giving: Donations can make a significant tax difference. By giving cash or assets, you may lower your taxable income while supporting causes you care about. Consider consulting a tax advisor to optimize your giving strategy and ensure documentation is in place for tax reporting.

3. Rebalance Your Portfolio

Over time, market shifts may impact the balance of your investment portfolio. Regularly reviewing and adjusting your asset allocation is essential to ensure it aligns with your goals and risk tolerance.

As you rebalance, assess whether a shift in asset allocation could help mitigate potential risks while aligning with your time horizon. Diversification doesn’t guarantee against losses, but it helps balance returns by spreading risk across different asset types.

4. Take Advantage of Retirement Accounts

Contributing to retirement accounts before the year ends can bolster your financial future:

IRAs and Roth IRAs: Depending on your income and age, you may qualify to contribute the maximum amount allowed, including catch-up contributions for those over 50. A Roth IRA offers tax-free growth and withdrawals in retirement, while traditional IRAs offer immediate tax deductions.

Employer-Sponsored Plans: For those with access to a 401(k) or similar plan, maximizing contributions is a powerful way to save for retirement. Remember, employer-matching contributions are essentially “free money,” so consider taking full advantage of any matching programs.

5. Optimize Health Savings Accounts (HSAs)

HSAs provide a tax-advantaged way to save for healthcare expenses, both now and in retirement. Contributions are tax-free, and any growth within the account is also tax-exempt when used for qualified medical expenses.

HSAs carry an annual contribution limit, which increases slightly each year, along with catch-up contributions for those over 55. Reviewing your HSA balance can help you prepare for future healthcare expenses while enjoying tax benefits.

6. Fine-Tune Estate Plans and Beneficiary Designations

The end of the year is an ideal time to revisit estate planning documents, including your will and beneficiary designations. Major life events—marriages, births and even changes in financial status—often warrant updates.

Verify that your assets are directed to the intended recipients and that beneficiary designations are up to date. Taking these steps now ensures your estate plan reflects your wishes and minimizes complications for loved ones.

7. Update Withholding and Other Tax Elections

To avoid surprises come tax season, review your withholding status. If you consistently owe taxes or receive large refunds, adjusting your withholding can improve your cash flow throughout the year. Life events, such as marriage or a new job, can also impact your tax status, so a quick review of your W-4 is beneficial.

For those with side businesses, you might also qualify for the home office deduction or other tax-advantaged business expenses. Consulting a tax advisor can help you determine which options best suit your circumstances.

Set Intentions for Financial Wellness in the New Year

Your financial health is an ongoing journey, and making proactive moves at year-end can position you for success. Take stock, assess, and plan strategically to make the coming year a prosperous one for your finances and beyond. Whether you’re looking to optimize tax savings, increase your retirement contributions or simply ensure your investment mix aligns with your goals, year-end planning offers a unique chance to set yourself up for the future.

One of our financial professionals can provide personalized insights and recommendations, helping you make the most of these opportunities. Don’t let the clock run out—start building your financial foundation today.